Complex trading system #5 (Fibonacci trading)

Traders were asking to post some strategies that will work on smaller time frames.
Here is one very nice trading system that can be worth your attention.

When a trader chooses to use small time frames (like 10 min, 15 min, 30 min even 1 hour) risks to be wrong are always higher than with larger time frames.
Therefore, it is very important to have a really good Forex trading system that can advise on entries with high chances to win and what's more important it should be able to tell exactly where to exit without need to constantly monitor the price.

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Hi Kiran,

sorry, I completely missed this page.

The stop level will be moved only when a new swing high/low is formed.
You can use Bill William fractals to identify tops/bottoms and move stops. Also, trailing alongside Parabolic SAR dots will work.

Best regards,

Hi Edward,

Thank you for the sharing the strategy and all your support provided through Q&A. I have a question for you to maximise my trading. Can you detail how Stop losses should be trailed/managed with a position in profit. I know initially the stop loss is placed 4-5 pips above the 61.8% Fib Retracement level for a (short), and 4-5 pips below the 61.8% Fib Retracement level for a (long), but can you detail when to amend the Stop Loss throughout the life cycle of the position.

Thanks again!


good fibonacci system

Ni Dennis,

you've made good observation and I agree with you about favoring /JPY pairs.

It wouldn't be, however, efficient to go in with two /JPY based pairs.
Instead have a look also at EURGBP, EURCHF and USDCAD alternatives.


Hi Edward,

This system works great. In the past I only traded de short timeframes 5 min, but continuing monitoring is not an easy job to do. I prefer now the larger timeframes with this strategie. I use it on 2 hours and 20 ema to look for the trend. I have less fals signales now. The last few months I only traded USD-YEN with this strategie and get some good results. I have have studyd all pairs with YEN and it looks like the fibonacci system works great with all pairs with the YEN in it. But would it be wise to trade two or three pairs at the same time with the YEN in it? for example USD/YEN and GBP-YEN?

thank you

Kind regards


Thank you, Miha

I haven't tried 15 WMA on 15min TF, it may filter some additional trades, I'm not sure.
I think at this point you can take the main concept and perform further testing with various indicator settings.

Regarding filters for a changing trend, consider reviewing the topics of Divergence trading, market Volume spikes and Elliott waves. Each topic is reasonably difficult, but this is where the power of predicting reversals is concentrated.

Something less complex could be found probably among custom Forex indicators, for example, you can try to figure out the benefits for this method (if any, of course) from using additionally:

Best regards,

Hi Edward, may-b someone asked you before so i apologize if the question was already answered. first of all I have to thank you and i cant express myself enough to do that. I was on one really expensive seminar about forex and the main subject was of course Fibonacci. I have to give you great compliments about your work and the way you teach us here, i very
appreciate what you are telling to us because i know a lot of ppl that are selling this
knowledge and believe me the price is not low and because of that, it makes me even more appreciate your work because of knowing it your giving it away for free :)
So to my question, can we use 15WMA on timeframe 15min ? Or is there something else to help us filter out the false trades, like to avoid trades when trend is about to change?
Regards, Miha

Yes, Jack

that's the way I like to write it: 5WMA and WMA5 are the same thing - both mean 5 period WMA.


Hello Edward
wht do you mean by 5 before wma did you mean 5 period

WMA is Weighted Moving Average. It should be available on every trading platform. Try asking your broker if you can't find it, otherwise you can more or less substitute it with SMA - simple moving average.


Hello Edward

Thanks for your effort i have 1 question
how can i get the WMA indicator plz ?

Edward & All

Thank you for this strategy. I have been using the fib retracements for few weeks now, but I have always struggled to know at which level should I enter the trade. Sometimes I would make an order entry at the 38% level, but the retracement would go to 50% or even 62%. And sometime I make order entries at the 50% or 62% level, and the market would hit the 38% and resume the trend. With the use of WMA 5 and other suggestions in this post I could now spot bad trades as well as entry points. I will test this a little bit further and let you know the results.



Hi Tony,

it is normal to be struggling when you try to apply a system that someone else uses, especially when you're trying to concur Fibonacci method. There is hardly ever a quick start - just read the strategy and comments on this website over and over again until it becomes clear.

With all my respect, there is no point in repeating the strategy rules over again. If you have any specific questions: a certain sentence or point, at which you no longer able to follow the logic behind the system, then feel free to quote and ask for further interpretation.
Also, after all, don't stop on one strategy if you have difficulties with applying it, move on, this way you'll make even more progress.


i am new trader with this system, but i knows how to use the fibo indicator, but am really having a little problem here, please can you just make this this simple method a bit clear to me, i.e when to enter a long and short position. with a meta4trader fibo indicator and chart.i really want to learn this this method because i have been lossing with my old method. mail me please [email protected]
tony from NG

Thank you, Phillip!
Great comments!



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